What Is SAPTO?
SAPTO is a non-refundable tax offset for Australians who receive an Australian Government pension or allowance, or who qualify for the age pension without claiming it. It reduces the income tax you pay, and the ATO applies it automatically when it assesses your return.
Because it is non-refundable it can reduce your tax to zero but cannot produce a refund by itself. It stacks with the Low Income Tax Offset and the zone tax offset.
One extra benefit is easy to miss: if you are entitled to at least $1 of SAPTO, you also qualify for a higher Medicare levy low-income threshold. If your income reduces your SAPTO to zero, you lose that too.
SAPTO Rates and Thresholds
Three figures matter for each situation: the maximum offset, the shading-out threshold below which you get the full amount, and the cut-out threshold at which the offset disappears.
| Status | Maximum offset | Shading-out threshold | Cut-out threshold |
|---|---|---|---|
| Single | $2,230 | $34,919 | $52,759 |
| Each partner of a couple | $1,602 | $30,994 | $43,810 |
| Each partner of an illness-separated couple | $2,040 | $33,732 | $50,052 |
ATO, Seniors and pensioners tax offset. 2025-26 income year.
Above the shading-out threshold the offset reduces by 12.5 cents for every dollar, and the ATO rounds the result up to the nearest whole dollar.
Worked Example: $39,000 Rebate Income, Single
The ATO’s own example. A single age pensioner with rebate income of $39,000 is above the $34,919 shading-out threshold but below the $52,759 cut-out, so the offset tapers:
| Rebate income above the threshold | $39,000 − $34,919 = $4,081 |
| Reduction at 12.5c per $1 | −$510.13 |
| SAPTO (rounded up) | $1,720 |
How SAPTO Works for Couples
Two different incomes drive the calculation, and mixing them up is the most common error. Your eligibility is tested on half your combined rebate income. Your offset amount is then worked out on your own rebate income.
The practical consequence is that a couple can pass the eligibility test while one partner still receives nothing. In the ATO’s example, a couple with rebate incomes of $54,020 and $25,677 have a combined $79,697. Half of that is $39,848.50, comfortably under the $43,810 cut-out, so the couple qualifies. But the higher earner’s own $54,020 is well past the cut-out, so their offset is nil — while their partner receives the full $1,602.
It also works in your favour. A single-income couple where one partner earns $33,650 and the other nothing is assessed at $16,825 each, so the earner stays eligible and receives $1,270.
What Counts as Rebate Income?
Rebate income is wider than taxable income, which is why estimating SAPTO from your salary alone overstates it. It is the total of:
- your taxable income
- reportable superannuation contributions
- total net investment loss
- adjusted fringe benefits
If you salary-sacrifice into super, those contributions count toward rebate income even though they are not taxable income. See our salary sacrifice calculator for how that interacts with your take-home pay.
Who Qualifies for SAPTO?
You must satisfy both a pension condition and an income condition.
The pension condition
You received one of these in the income year: Age Pension, Carer Payment, Disability Support Pension (if you are age-pension age), Education Entry Payment, Parenting Payment (single), age service pension, income support supplement, Veteran Payment, invalidity service pension (if age-pension age), or partner service pension.
You also qualify if you were age-pension age and eligible for the age pension but did not receive it — because you did not claim, or failed the income or assets test — provided you meet an Australian residence condition. Age-pension age has been 67 since 1 July 2023.
The income condition
- No spouse: rebate income under $52,759
- Couple: combined rebate income under $87,620
- Illness-separated: combined rebate income under $100,104
You cannot claim SAPTO if you were in jail for the whole income year.
Transferring Unused SAPTO to a Spouse
If you and your spouse are both eligible and one of you does not use the full offset, the unused part can transfer. The ATO calculates and applies this when you both lodge — you do not claim it manually.
Where your spouse’s taxable income is $6,000 or less, the whole offset is available to transfer. Above that it reduces by 15 cents in the dollar: A − ((B − $6,000) × 0.15), where A is your spouse’s offset and B is their taxable income plus exempt pension income.
Related Calculators
- Low Income Tax Offset Guide — the offset most SAPTO recipients also claim
- Zone Tax Offset Calculator — for remote-area residents, and it stacks with SAPTO
- Medicare Levy Guide — including the higher SAPTO low-income threshold
- Income Tax Calculator — your liability before offsets
- Australian Tax Brackets
Frequently Asked Questions
SAPTO questions and answers
How much is SAPTO?
The maximum seniors and pensioners tax offset is $2,230 if you are single, $1,602 for each partner of a couple living together, and $2,040 for each partner of an illness-separated couple, for the 2025-26 income year. You receive the full amount if your rebate income is below the shading-out threshold — $34,919 for singles.
What is the SAPTO income threshold?
There are two thresholds. Below the shading-out threshold you get the maximum offset: $34,919 single, $30,994 each for a couple, $33,732 each if illness-separated. At or above the cut-out threshold you get nothing: $52,759 single, $43,810 each for a couple, $50,052 each if illness-separated.
Who is eligible for SAPTO?
You must meet two conditions. First, you must receive an Australian Government pension or allowance — Age Pension, Carer Payment, Parenting Payment (single), Disability Support Pension if you are age-pension age, or a DVA service pension — or qualify for the age pension without claiming it. Second, your rebate income must be under the relevant limit. Age-pension age has been 67 since 1 July 2023.
How is SAPTO calculated for a couple?
Two different incomes are used, which catches people out. Eligibility is tested on HALF your combined rebate income against the cut-out threshold of $43,810. But the offset amount is then worked out on your OWN rebate income against the shading-out threshold of $30,994. So a couple can qualify while one partner still receives nothing because their individual income is too high.
What is rebate income?
Rebate income is broader than taxable income. It is your taxable income plus reportable superannuation contributions, total net investment loss, and adjusted fringe benefits. Using taxable income alone will overstate your offset.
How fast does SAPTO reduce?
The offset reduces by 12.5 cents for every dollar of rebate income above the shading-out threshold, and the ATO rounds the result up to the nearest whole dollar. A single person on $39,000 gets $2,230 − (($39,000 − $34,919) × 0.125) = $1,719.88, rounded up to $1,720.
Can I transfer unused SAPTO to my spouse?
Yes. If you and your spouse are both eligible and one of you does not use the whole offset, the unused part can transfer. The ATO works this out when you lodge. Where your spouse's taxable income is $6,000 or less the full amount transfers; above that it reduces by 15 cents in the dollar.
Is SAPTO refundable?
No. SAPTO is non-refundable, so it reduces your tax payable to a minimum of zero but does not generate a cash refund on its own. Any excess is lost rather than carried forward.
Does SAPTO affect the Medicare levy?
Yes, favourably. If you are entitled to at least $1 of SAPTO you also qualify for a higher Medicare levy low-income threshold. If your income reduces your SAPTO to zero, you cannot use the SAPTO Medicare threshold.
Can I claim SAPTO and the Low Income Tax Offset together?
Yes. SAPTO, LITO and the zone tax offset are separate non-refundable offsets that stack. Together they can reduce your tax to zero but not below it.
Which financial year do these SAPTO amounts apply to?
The 2025-26 income year — the return being lodged now. The ATO publishes SAPTO thresholds with each year's rates, and had not released 2026-27 figures when this page was last verified.
What if I was in jail during the year?
You cannot claim SAPTO if you were in jail for the whole income year.
How this calculator works▼
Rates, thresholds and the calculation method come from the ATO’s Seniors and pensioners tax offset page (QC72197). They apply to the 2025-26 income year — the return being lodged now. The ATO had not published 2026-27 SAPTO thresholds when this page was last verified, so it is not labelled with that year. Every figure on this page is derived from a single constants file and checked against the ATO’s nine published worked examples in automated tests.
Sources & References
- 1Seniors and pensioners tax offset— Australian Taxation Office
- 2Rebate income— Australian Taxation Office
Last verified: 28 July 2026. Our content is based on the latest information from official Australian government sources.
James Harrington
Verified AuthorSenior Tax & Payroll Analyst
CPA, Registered Tax Agent (25787011)
James is a CPA-qualified tax professional with over 14 years of experience in Australian taxation and payroll systems. He spent six years at the Australian Taxation Office working on PAYG withholding and individual tax return processing before moving into financial publishing. He now leads the tax content at Pay Calculator Australia, translating complex ATO legislation into clear, actionable guidance.
Areas of Expertise